Centrica confesses lack of efforts in convincing customers to switch to cheaper tariffs

November 21st, 2019
Centrica

MPs grill UK’s biggest energy supplier British Gas on lack of effort to contact customers to convince them to switch from Standard Variable Tariff to cheaper energy tariffs. Followed from the interview, the British Gas chief confessed that the company has not contacted its SVT customers for enough number of times to convince them to switch to cheaper energy tariffs. The committee decided a hearing on the Government’s proposed energy price cap plans and realized that many UK energy suppliers especially the Big Six gas and electricity suppliers are not contacting their customers the way they should.

The company confessed this lack of effort from their end in a Commons committee hearing with MPs. Centrica chief confirmed that its child company British Gas has contacted customers for six times a year while it could do it for more number of times. British Gas has around two third of customers on Standard Variable Tariffs, which are considered the most expensive energy tariffs. The MPs noted the fact that medium sized companies like First Utility contacts its SVT customers thirteen times a year while the Big Six energy suppliers including E.On and SSE contact their customers on a quarterly basis.

Sarwjit Sambhi, managing director of UK Home at Centrica declared to the BEIS committee that it needs to interact more with its SVT customers. “We haven’t done enough over the last three years. After the CMA (Competition and Markets Authority) report, we had to look in the mirror and see what it is we haven’t been doing with respect to engagement. There’s a lot more that we can do perhaps the answer is that we could be contacting our customers once a month. I’ll look at whether the frequency could be increased.”

British Gas also confessed that it can deal with the energy price cap by abolishing the Standard Variable Tariffs and increasing customer engagement. However, the ministers grilled it and asked for an explanation for keeping loyal customers on expensive tariffs. They asked whether it was fair on the part of the gas and electricity supplier to charge £300 more from customers who did not switch to cheaper energy suppliers. While British Gas admitted to its flaws other Big Six energy suppliers are equally involved in charging more from its loyal customers.

As per statistics, E.On has 61% of its customers on the Standard Variable Tariffs while SSE has 72% on the most expensive tariffs. Most of the UK energy suppliers are planning strategies to reduce the number of its SVT customers while British Gas has already announced the scraping off of SVTs for its new customers. This move of the gas and electricity supplier will come in effect from early next year.

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